1. REVENUE MODEL: What best way to charge your customers? Bonus Topic: (Startup) Company/Office Culture Dave Schappell - @daveschappell

2. Who am I? Founder – TeachStreet Angel-funded / VC-backed Founded in ‘07 – Profitable in ‘11 ex-Amazon, JibJab Former CPA NEVER built a profitable business on my own (yet)

3. Transform the Lifelong Learning Marketplace 49M College Grads / 77M Baby Boomers / 31M Retirees >$30B/year spent by 54M in U.S. taking personal interest classes $5B/year TAM (Marketing, Transaction Fees, Affiliate Sales)

5. Don’t want biz to go bankrupt

6. Think customers will pay

7. Aren’t sure how they’ll pay

8. Not sure how to find out/testdone that almost did that thought that too (& was wrong) wasn’t positive either

10. Subscriptions

11. Virtual GoodsAds Lead-Gen Affiliates/CPA

12. 5 Steps to Business Planning Plan next 2-3 Years of your Biz What HAS to come first? - Features, Assets, Office, Employees * Make a Good/Great Product! * What’s your MVP (Minimum Viable Product)? Remove unnecessary items Create a timeline Add 3-6 months to everything http://www.seattle20.com/blog/Business-Beta-2013-Prioritizing-Startup-Features.aspx

14. Product / Market Fit

15. 80% on Optimization

16. Revenue When?

17. Don’t Put Ads on your Site!

18. Don’t Worry about Viral

19. 5 Tips to TransitionfromFree to PAID

20. 5 Tips to go Free to PAID Give plenty of notice & (real) chance for feedback Price it ‘fairly’ (probably still at a deep discount) Offer customers a way to get product for free Provide Grandfather’d Pricing Make transition gradual People should/will only pay if you’re delivering value

21. #1-Give Notice & Chance for Feedback http://www.flickr.com/photos/whitehouse/4753634006

22. #2-Price it Fairly http://www.flickr.com/photos/emilyandthemagic/4974797851

23. #3-Give Customers a Way to get Free http://vincee87.wordpress.com/2009/09/12/will-work-for-beer/

24. #4-Provide Grandfather’d Pricing http://www.flickr.com/photos/orinrobertjohn/4297220022

26. #5-Make Transition Gradual http://www.flickr.com/photos/sepblog/3570992970

27. So, How’s TeachStreet? Launched ‘All Paid’ in late April 2010 Pro/Sub Revenue up 56% Listing Fee Rev is now 75% of Pro/Sub Rev And, it’s 2x’d since May 2010 Operational Revenue up >120% Leads to Teachers up >115%

29. “Overnight” Timeline to ‘Semi-Success’ Jun ‘07 - founded company; raised Angel $ Apr ’08 - ~25k classes & teachers in Seattle – teachers could add unlimited classes; students could contact teachers. Limited functionality. Let us demonstrate value & learn (100% free) Apr ’09 - +7 cities; expanded tools (phone tracking, teacher metrics) (100% free) Jul ‘09 - Student-to-Teacher payments. 15 months to launch?!? Believed needed to demonstrate value-add. Students paid small booking fee (to cover costs); Teachers paid commission (still free to add listings) Sep ‘09 - Pro teacher $29.99/month; extra promo, marketing tools, free payments. (still 100% free to add listings; revenues are building from services)  Apr ‘10 - optimize/weblab – addt’l lead-tracking – believed we’d never earn biz if didn’t deliver value (more, new students) to teachers (still free to add listings) Apr 7, 2010 - “pre-announce” introduction of fees for all new class listings April 27, 2010 - “turned on” listing fees (100% new listings paid; All rev-enabled) May 12, 2010 - last day of $10/month “Pro”-motion (100% new listings paid) At present - Traffic’s growing, Revenue's ramped sharply, and we’re 100% sure that we’re going to have to keep pivoting. Because that’s what startups do.

30. Rules We Break Both Direct & Indirect Subscriptions & Listing Fees Lead-Gen, Affiliates & Ads We have (some) Ads We don’t Weblab/test enough Too few resources / too many ideas  Still are attracted to shiny objects

31. Startup Culture(Myths & Reality)

32. Startup Culture Conundrum

33. Office Culture Reco’s Office Space for Cheap / Free Real Estate advisors work for free! Door Desks + Craigslist = Awesome Salary = $$$  Snacks = “nothing” Paint (and big-screen TV) are cheap Office Cleaning saves Marriages Weekly Beers & ‘vision connect’ Dogs, Art & Fun Rent out your space!

34. Resources Andrew Chen – www.andrewchenblog.com Dave McClure – 500hats.typepad.com Alyssa Royse – Seattle 2.0 Post(s) My TechCrunch Post on ‘Free to Paid’ http://techcrunch.com/2010/06/13/free-to-paid-tips/ My 500Startups Office Culture post:http://blog.500startups.com/2010/10/11/how-to-sustainably-make-the-startup-office-more-livable/ Hops & Chops Startup Happy Hour (Thursdays) www.hopsandchops.com